Your investment timeframe
When deciding which investment option is right, consideration needs to be given
to how long a member's super is going to be invested. This is known as the investment timeframe, and it will be influenced by the member's age and how long they have to invest.
When members invest over a long period of time, the value of their investment tends to be less susceptible to the occasional negative return, whereas when they have money needed for a specific purpose in the shorter term (such as for lump sum withdrawals or for month-by-month pension payments) it may be more important that they minimise the possibility of a negative return.
The investment timeframe should not be based on the member's retirement date as the average person spends at least 20 years in retirement and they can keep their
benefit in super indefinitely.
It's important to remember that your timeframe may be longer than you think, so you'll need your savings to last the distance.
Short-term investment timeframe
If the investment timeframe is for the shorter term (say, less than five years) when, for example, a member may want to take their benefits as a lump sum withdrawal, it may be more important that they minimize the risk of a negative return and choose a lower risk option such as Cash, Cash Enhanced or Conservative Conservative market-linked investment options or the Fixed Term Investment option.
Long-term investment timeframe
If the investment timeframe is longer than five years, a member may consider a higher risk investment option such as Balanced or Growth, as they will have more time to ride out the ups and downs that generally come with the higher risk options.
Over the longer term, the chances are that the number of years of higher or positive returns will outweigh the number of years with low or negative returns.
Seek advice
A licensed financial planner can work with you to choose the right investment option to suit your needs and retirement goals.
Maritime Super can arrange for a qualified financial planner to help. Contact Member Services to arrange an appointment.